Problem 1 (10 marks) XYZ COMPANY will begin stocking a new product. Expected monthly demand is 1000 units, standard deviation of lead time demand = 50 units. The products can be purchased from either supplier A or supplier B. Their price lists are as follows: Supplier A (LT=16 days) Supplier B (LT=9 days) Quantity Unit Price Quantity Unit Price 1-299 300-599 600+ $12.00 12.80 12.60 1-149 150-349 350+ $15.00 14.90 14.70 Ordering cost is $50 and annual holding cost is 30 percent of unit price per unit. 1.1 (5 marks) Which supplier should be used and what order quantity is optimal if the intent is to minimize total annual costs? 1.2 (2.5 marks) How many orders per year will there be? 1.3 (2.5 marks) Assuming that lead time demand is normally distributed, determine the safety stock needed to attain a 5 percent risk of stockout during lead time